Tag Archives: Sole Source

The House Small Business Committee continued its streak as one of the most productive and bipartisan committees in Congress, with the passage of eight bills after they held a markup. A number of the bills addressed issue impacting government contracting. Below highlights some of the bills of importance to women business owners:

This bill gets rid of the requirement that the sole source award can only be $4 million for the life of the contract, allowing sole source awards to now be $4 and $7 million per year. Additionally, for WOSBs and SDVOBs, the bill implements a new eligibility determination process for sole source awards. In addition to the current requirement that contracting officers must verify eligibility before awarding the contract, this bill requires SBA to also verify eligibility.

There was an amendment to the legislation that extends elimination of option years to the 8(a) program as well and will get rid of WOSB eligibility verification once SBA comes up with their own process to verify, which is in the works.

This bill creates incentives for prime contractors to reach their subcontracting goals by receiving credit. Prime contractors will be required to keep records of subcontracting credit claimed at lower tiers. It also designates the OSDBUs in agencies to resolve issues of non-payment of subcontractors.

One amendment was made to this bill requiring subcontractors to tell the primes that they are doing dispute process for non-payment and if primes want to get credit, they have to report on what work is actually going to the small businesses.

This bill creates a reporting requirement on small business participation on Best in Class (BIC) vehicles. An amendment added to this legislation puts an effective date that the data must be reported, which is once it is available in SAM.

This bill would modify the SBA reporting requirements to have businesses report their average earnings over the last five years, rather than three which will provide more certainty to small businesses as they ramp up their operations and grow over time. This is important for growing businesses who may slow their growth to avoid being pushed out of the “small” category before they have the capacity to compete with larger businesses.

This bill makes a series of changes to the Small Business Innovation Research and Small Business Technology Transfer programs, making them easier for small firms to use and allowing experienced firms in the SBIR/STTR programs to mentor younger companies.

The SBA Inspector General (IG) issued an audit report late last week that found 50 of the 56 sole source awards the IG chose to review were done incorrectly, either by the contracting officer or the woman-owned business. They found paperwork problems, such as self-certifying WOSBs that did not have all of their required documentation in place, contracting officers that awarded a sole source with a NAICS code that was not in the WOSB program or awarded a sole source under a NAICs code that the WOSB had not indicated they were eligible to perform the work.

To those of us who have been involved with the Women-Owned Small Business (WOSB) Procurement Program from the inception, this is not the first time the SBA Inspector General has aggressively advocated to do away with self-certification in the WOSB program. The Congress passed legislation in 2015, instructing the SBA to stand up a certification program, replacing self-certification. The SBA has stated that it is in the process of putting together this directive sometime later this year.

There is history behind this effort – when the program was put in place in 2011, it would have taken decades and further delays for an SBA certification program to be put into place. Therefore, the SBA opted to allow self-certification and third-party certification in its stead. The IG was directed to aggressively investigate fraudulent companies, but we are not aware of any such efforts or reports from the IG issued with that focus. In fact, WIPP sent a letter to the IG asking for status of investigations into fraudulent companies and is not aware of a response.

Specifically, the IG makes the following recommendations:

Conduct eligibility reviews for the firms identified in this report that lacked the required documentation in Certify.SBA.gov and require those firms to remove their designation in the System for Award Management.

Initiate debarment proceedings, if warranted based on the results of eligibility reviews in Recommendation 1.

Implement a Women-Owned Small Business Federal Contracting Program certification process as required by the National Defense Authorization Act for FY2015.

Conduct quarterly reviews of firms with newly obtained WOSB or EDWOSB status, to ensure that they have the required documentation in Certify.SBA.gov, until SBA implements a Women-Owned Small Business Federal Contracting Program certification process.

Conduct quarterly reviews of Federal Procurement Data System-Next Generation data for Program set-aside contracts to ensure Federal agencies’ contracting officers used the appropriate North American Industry Classification System codes and take the necessary action(s) with identified exceptions.

In coordination with the Office of Federal Procurement Policy and the General Services Administration, strengthen controls in the Federal Procurement Data System-Next Generation to prevent Federal agencies’ contracting officers from using ineligible North American Industry Classification System codes.

SBA Response

At the end of the report, the SBA provides a rebuttal to the IG’s recommendations. The SBA reiterates its intention to establish a certification program sometime this year with implementation next year. The SBA questions the IG’s data conclusion saying that miscoding on FPDS does not necessarily mean that the sole source contract was improperly awarded and rejects the recommendation that SBA should check quarterly reviews on women new to the program and on contracts awarded through the program, ensuring contracting officers used the proper NAICs codes. The SBA also disagrees with the IG interpretation that sole source contracts should only be awarded when SBA has a certification in place.

WIPP Perspective

WIPP led a 13- year effort to put in place the WOSB Procurement Program garnering the support of women-owned companies nationwide. The SBA’s IG audit found much of what we already know antidotally – that the program is complex, that contracting officers and women alike are confused by the requirements, and more education is needed. We do not agree with the IG that it was the intention of Congress to require an SBA certification before any sole source awards could be issued. We know this to be true because we were there when it happened – leading the charge on this effort. Furthermore, we find the recommendation that WOSBs should be monitored quarterly for compliance as demeaning given the recommendation is specific to WOSBs only.

We agree that the WOSB program should be better utilized by the contracting community. The government has only met its 5% women-owned goal once. Since 2013, WIPP has educated tens of thousands of women on federal contracting opportunities via the WOSB procurement program through our ChallengeHER and Give Me 5 programs. We call on Congress and the SBA to encourage federal agencies to use the WOSB program and simplify the requirements, which have proven to be confusing. We will continue to promote federal contracts to women-owned companies both in our advocacy and our programming.

WIPP’s 15-year effort to expand contracting opportunities for women entrepreneurs cleared an important hurdle with sole source authority finalized in the government’s contracting rulebook. The Federal Acquisition Regulation (FAR) is the government’s official source for rules when it comes to awarding contracts. Implementing sole source authority into the FAR means that women entrepreneurs wll now be competing on a level playing with other small business contracting programs.

WIPP’s comment on this rule acknowledged the FAR Council for recognizing the “urgent and compelling need” to grant contracting officers this authority. Their recognition is the culmination of years of hard work and advocacy to bring parity for women-owned contracting firms.

Although the Small Business Administration (SBA) published sole source rules last fall, some contracting officers had been waiting for official language to be put into the FAR before they would use sole source authority. WIPP members have experienced this inconsistency firsthand and WIPP’s comment highlighted how important it is for the FAR to eliminate the conflict.

The FAR Council’s rule became effective on December 31, 2015 – a great way to start the New Year. Contracting officers now have official instructions to award sole source contracts through the WOSB Procurement Program. We encourage women business owners to comment on this important victory for our community. If you wish to echo WIPP’s comments, you can submit them electronically using Regulations.gov and search for “FAR Case 2015-032.” Please use the “Comment Now” option, which will provide instructions for uploading your document and ensure that your voice is heard.

WIPP has reason to celebrate with all women business owners. As of today, contracting officers now have the authority to award sole-source contracts to women-owned small businesses. This authority will level the playing field in the federal marketplace and provide additional opportunities for women entrepreneurs to expand their businesses.

So how do you get a sole sourced contract? There are four questions to ask when considering if a contract can be awarded to a WOSB via sole source authority:

Is the contract in a WOSB or EDWOSB eligible NAICS code?

The Women Owned Small Business (WOSB) Procurement program is unique in that it is only applicable to contracts in certain NAICS codes. In addition some NAICS codes are open to all WOSBs, while some are only available to Economically-Disadvantaged WOSBs (EDWOSBs). You can check if a contract’s NAICS codes are in the program on the SBA website www.sba.gov/wosb. Again, the NAICS code of the contract, not just your company, is important.

Is the contract (including options) valued at $6.5 million or less for manufacturing contracts or $4 million or less for all other contracts?

Similar to other small business contracting programs, WOSB sole source contracts are limited to certain sizes. For manufacturing contracts (the 31-33 NAICS codes) that cap is $6.5 million, while all other contracts have a cap of $4 million. This is including all options on the contract.

Can the contract be awarded to the WOSB or EDWOSB at a fair and reasonable price?

The law also requires that the contract can be awarded at a “fair and reasonable price.” This common term in federal contracting is described in the FAR – essentially the federal procurement rulebook. Good news – if you are submitting pricing that is on the GSA schedule, it is already considered fair and reasonable.

Lastly, in the determination of the contracting officer, is there a reasonable expectation that there is only one WOSB/EDWOSB that can perform?

The final requirement for a sole-sourced contract in the WOSB program is the contracting officer’s determination, through market research, that only one WOSB/EDWOSB can perform the requirement. Many people find this component especially difficult, however, it is important to note that agency-specific requirements may make your solution unique. Also, if it is determined that 2 or more WOSB/EDWOSBs can perform, the contract can be set-aside through the WOSB program.

If the answer to all four questions was yes – you have yourself a strong case for a WOSB sole source contract.

Keep an eye out for additional education from WIPP on sole source authority. WIPP will be working with the SBA and OSDBU offices to help educate both women business owners and contract officers on sole source authority.

When you’ve been working on a program for 15 years, it’s almost anti-climatic when you realize you won and it’s over. I suppose lawyers feel this way when they win a big case, or business owners when they close a major contract.

For me, the SBA announcement integrating a sole source component into the WOSB procurement program on October 14, 2015 marks the end of a long campaign by Women Impacting Public Policy (WIPP). First, we fought for eleven years to establish a program that gives a government buying preference to women-owned companies whose industries have been underrepresented. Not an easy fight – we had plenty of Congressional and White House opponents—it wasn’t until the Obama Administration came into power that the program was established. At the time, SBA Administrator Karen Mills made it her number one priority, which we will always be thankful for. We had strong Congressional proponents – Senators Cantwell and Shaheen and Representatives Speier and Graves.

Then, we had to make the program work. That required two major changes to the program in 2013 and 2014. The first change required lifting the award caps the law imposed on the program. The WOSB procurement program limited contract awards through the program to $4 million ($6.5 million for manufacturing). In 2013, Congress helped us get rid of those caps. The last big piece was the sole source piece—allowing contracting officers to award sole source contracts to women-owned companies through the program. This major change gives the program parity with other small business programs and again, required Congressional action. Effective October 14, agencies will be able to use this mechanism to award contracts to women whose companies offer innovative products and services.

As with all government programs, the rules are a little complicated and the ability to self-certify as a woman owned business will eventually have to change, due to Congressional direction in 2014. But for now, self-certification remains the law and women should be actively pursuing contracts through the WOSB procurement program whether or not they are self-certified or certified by a third party.

It is important to note that not all industries (NAICS codes) qualify for the program. You can find a list at http://www.SBA.gov/WOSB. We have developed a one pager that go through the rules of the sole source portion of the program and our GiveMe5 program has comprehensive information on the WOSB program. In addition, our ChallengeHER events are all over the country so that women can find out more about the program. The information can all be found at www.wipp.org.

The WOSB procurement program is in good hands. All the major pieces to make it successful are in place. When we started this effort in 2002, women received 2.7% of government contracts. Since the program has been in place, more than $500 million has been set-aside for women- owned companies. In fact, in 2014 the government awarded 4.7% of its contracts to WOSBs –a 75% increase since 2002. Now women business owners need to know how to use it with the help of SBA, the federal contracting community and organizations, such as WIPP.

Fifteen years seems like a long time, but when you are fighting for something—somehow it doesn’t seem that long. WIPP members and coalition partners were with us every step of the way. For this, I am exceedingly grateful.

We sat down with Tracy to hear more about her business and her relationship with WIPP:

Tell us a little about your company and its mission.

FSR was started with the desire to help our wounded warriors heal and to provide healthcare personnel with the clinical expertise to our military treatment facilities and VA hospitals around the country.

Have you always been an entrepreneur? If not, what, or who, inspired you to take this leap?

I was a Registered Nurse with 25 years of ICU and Trauma nursing experience. I had the opportunity to work at Walter Reed Army Medical Center as a government contractor. This exposure provided me the ability to care for individuals who had sacrificed for our freedoms, hear their stories and meet their families. I was encouraged to start a business that could provide more than just my expertise at the bedside and also be an employer of best in class healthcare professionals that had the same passion as I did.

How has your background in Healthcare helped develop and grow your company?

As a RN, I understood the environment that I was placing our professionals in. I could speak the same language, however, learning the business of government contracting was a challenge as my background was in patient care. I was working nights as a RN at Walter Reed and during the day, I was focused getting business, writing proposals and learning about government contracting.

Do you have a contracting success story that you are proud of?

There is not one contract that I am more proud of than the others, however, none came without sacrifices and hard work. Once you receive a Government contract, your goal is to exceed your customer’s expectations and gain outstanding performance ratings. Having gotten my 8(a) certification within the same year as I started FSR (through a waiver), has helped me a great deal, although it took 18 months of hard work and complete dedication before I got my 1st Government contract.

Tell us about your experience as a WIPP Member? What resources/value has WIPP provided that has been helpful to you and your company?

WIPP has provided me with the education on policy and what is going on in government contracting in a concise fashion. There is a lot of material to read and learn about, however I can go to a single website and find out what is going on. I was so excited that WIPP was so instrumental in getting sole source opportunities and specific set asides for WOSB!

Just a few days ago, the Small Business Administration announced a proposed regulation that puts in motion sole source authority for the WOSB procurement program.

SBA did a very wise thing—it separated out the sole source authority piece from the certification portions of the law. Why? Because sole source authority is standard language included in the HUBZone and Service-Disable Veterans programs. It is not a heavy lift to basically cut and paste the language into the WOSB program.

The certification piece, on the other hand, is not standard language. Each small business program administered by SBA has different certification requirements. The law also reads that SBA doesn’t have to put in place a certification program for WOSBs. SBA can choose to accept other federal agency, state certifications or 3rd party certifications. Or, SBA could establish its own certification for WOSBs if it so chooses.

This determination will require a thorough examination of resources SBA can devote to establishing and policing the certification and whether it could launch a program without significant delays as have been experienced in other programs.

Yet another consideration SBA will have to make is what to do with the tens of thousands of women who self-certified for the program. Without a proper transition, the program would be thrown into chaos.

For these reasons, the certification part of the law needs much more consideration and public comment than does the sole source portion of the law.

Now you need to take action. If you agree with SBA’s expeditious implementation of sole source, you need to let your voice be heard. Go to www.regulations.gov. Keyword: SBA. Click on the regulation and you will see the opportunity to comment. Let the SBA know that women business owners are waiting excitedly on this change.

In case you are not familiar with sole source authority, it allows contracting officers to award a sole source award through the WOSB procurement program, given the contracting officer does not have a reasonable expectation that two or more businesses will submit offers. Sole source contracts through the program are limited to $4-6.5 million depending on the industry.

SBA has taken the first step toward putting the WOSB procurement program on equal footing with other SBA programs. We expected no less.